ONS is currently developing a new short-term indicator of inflationary pressures emanating from the labour market, called a labour costs index (LCI) to be released as an experimental indicator toward the end of 2003. It will measure changes in total labour costs, which includes wages and salaries, pension and social security contributions, benefits in kind and other non-wage components.
The LCI will use the number of hours worked by employees to measure changes in average labour costs per hour. ONS has conducted a survey of businesses to assess the ease with which they could provide data on non-wage labour costs and hours of work. It shows that data on hours of work are not easily available from businesses. The survey also showed that the ease with which other non-wage labour costs information is available is roughly inversely proportional to size of business.
The article also describes the interim LCI currently provided by ONS to Eurostat to meet the requirements of European legislation, the time frame for developing the LCI and the method of construction of the index.
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